CareEdge Ratings Upgrades STEELXIND's Credit Ratings to BB+; Stable
Steel Exchange India Limited received credit rating upgrades from CareEdge Ratings for its Non-Convertible Debentures, Long-Term, and Short-Term Bank Facilities, reflecting improved operational and financial performance, capacity expansion, and debt refinancing.
A credit rating upgrade is a significant event that can lead to lower borrowing costs, improved financial flexibility, and enhanced investor confidence, thus having a high impact on the company's financial standing and market perception.
The credit rating upgrade across all instruments, driven by improved operational and financial performance, successful capacity expansion, debt refinancing, and a positive outlook, indicates a strong positive sentiment.
Steel Exchange India Limited (STEELXIND) announced that CareEdge Ratings Limited (formerly CARE Ratings Limited) upgraded its credit ratings on October 08, 2025. The instrument-wise rating actions are as follows: * Non-Convertible Debentures (₹230.91 crore) upgraded from CARE BB-; Stable to CARE BB+; Stable. * Long-Term Bank Facilities (₹10 crore) upgraded from CARE BB-; Stable to CARE BB+; Stable. * Short-Term Bank Facilities (₹40 crore) upgraded from CARE A4 to CARE A4+.
The revision reflects an improvement in operational and financial performance, aided by successful capacity expansion and a favorable change in product mix. The company's financial risk profile is expected to improve following the successful refinancing (prepayment/takeover) of ₹350 crore of existing debt, resulting in a substantial reduction in overall interest cost. Additionally, promoters' extensive experience and SEIL’s established brand presence in southern India contributed to the upgrade.
In FY25 (year ended March 31, 2025), SEIL reported approximately 5% growth in total operating income (TOI) to ₹1,144 crore, compared to ₹1,091 crore in FY24. Profitability is further expected to improve due to in-house production of 8 mm and 10 mm rebars post-capex, which will reduce outsourcing costs. The company also secured conversion contracts with industry peers and obtained product approvals for infrastructure projects. The PBILDT per tonne improved by 25% to ₹6,495 per tonne in FY25 (FY24: ₹5,192 per tonne). Profit After Tax (PAT) improved significantly to ₹25.52 crore in FY25 from -₹33.47 crore in FY24. Overall gearing improved to 0.74x as on March 31, 2025, and interest coverage improved to 1.67x in FY25.
SEIL expanded its billet production capacity from 250,000 metric tonne per annum (MTPA) to 362,000 MTPA and rolling mill capacity from 225,000 MTPA to 357,000 MTPA, completing the ₹77 crore project in FY25. This expansion is expected to drive cost savings of up to ₹3,000 per tonne for TMT bars. Furthermore, the company secured a 120,000 MTPA conversion contract from Rashtriya Ispat Nigam Limited (RINL), expected to generate incremental PBILDT of about ₹27 crore annually. The outlook on the ratings is Stable.
However, ratings remain constrained by working capital intensive operations, with a significant portion of funds blocked in inventory and receivables, leading to an operating cycle of 118 days in FY25, and fully utilized working capital limits. Ratings are also moderated by the inherent cyclicality of the steel industry, high debt levels, moderate coverage indicators, and susceptibility of profitability margins to volatility in raw material and finished goods prices.
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STEEL EXCHANGE INDIA LIMITED filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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